Windfall taxes and an ‘anti-Putin shield’: how Europe is tackling energy crisis
The debate over whether Britain should introduce a windfall tax on North Sea oil and gas companies has been reignited by bumper profits at BP. The one-off levy is among a suite of measures that have been proposed to tackle the energy crisis, which has sent household bills soaring.
The war in Ukraine has exacerbated existing supply problems and left governments across Europe scrambling to protect consumers from the cost of living crunch. The Centre for Economics and Business Research has estimated that, without government intervention, energy costs could increase by 40% across the eurozone in 2022, up from a 13% rise in 2021. Deliberations over sanctions on Russian energy supplies and measures to limit the fallout of the conflict continue in Europe.
In the UK, analysts have said bills could reach as much as £3,000 a year in October, when the price cap is due to go up again, if wholesale gas prices do not fall. Here is how different governments across Europe have reacted.
The chancellor, Rishi Sunak, has been repeatedly criticised for acting slowly on tackling the energy crisis. The government has so far resisted calls from Labour and the Liberal Democrats to introduce a windfall tax on the profits of North Sea oil and gas operators, arguing that it would discourage investment in domestic energy supplies.
In February, Sunak said 28m households will receive a £200 discount on their bills from October. The cost will be recovered over the next five years.
Ministers rejected calls for a cut on the 5% VAT rate on energy bills in favour of a one-off rebate of £150 for households in England in council tax bands A-D. A further £144m has been set aside to support vulnerable people and those on low incomes.
The Italian prime minister,
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